Is debt relief settlement the only way out? Here’s what you need to know

Date Posted: March 2, 2022
By: Maggie Marques

Is it time for a debt relief settlement? If your purchases have been declined and maxing out your credit cards is a regular occurrence, then it might be wise to start thinking about it. If you are getting deeper into debt and it seems that you can’t breathe anymore, it may be time to think about applying for a debt relief settlement.

Can you imagine somebody promising you help in reducing your debt? A call comes, and somebody from a debt relief settlement company promises to erase your debt and give you a new lease in your financial life; you’d jump to it, right? Wait! Before you do something and commit to their offer, here are some things you might want to consider:

1. Debt relief settlement companies will cost you money. These companies will be negotiating your debt to your creditors, but they will be charging you for the work that they do. Working for a debt relief settlement is hard work. Talking with your creditors isn’t a one-time thing. There will be a lot of talks and a series of haggling as well.

2. Debt relief settlement will not wipe your debts clean. You will still have to repay your debts when approved, but it may not be the total amount anymore. You will need to start saving money for a lump sum payment. If your debtors accept your debt relief settlement, it will be because you have a substantial amount of cash on hand to repay them. The more considerable the amount is the better chances of getting the nod of your debtors because whatever you offer to lay down on the table is better than risking the prospect of not getting paid at all. Debt relief settlement is not always guaranteed. You will be at the mercy of your creditors, and they will always have the last say if they agree with your terms or not.

3. Debt relief settlement can hurt your credit report. For a debt settlement program to work, you will have to stop paying your monthly obligations altogether to prove that you can repay your debts and will keep on defaulting on your payments and fees. These acts will hurt your credit report and history, and you can even be sued.

It will always be best to repay your debts on time and handle your finances well, but if that is not a possible option at the moment, a debt relief settlement may be an option you can consider.

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